Car insurance is a service you pay for to help cover costs in case of an accident or other car-related event.
What Is Car Insurance?
If you drive, you need car insurance, plain and simple. Car insurance does not only cover your car. It protects your personal property, your family’s finances, and your physical safety. Understanding car insurance is an essential step in ensuring you are protected from unexpected events or losses.
Once a month or once every six months, you pay an insurance company a premium solidifying your agreement that they will cover you per the policy specifications that you have requested and paid for.
In turn, you have obligations: you agree not to make fraudulent claims, behave in a negligent way that might cause a claim, or stop paying premiums.
What Does Car Insurance Cover?
Car insurance is divided up into different types of protection that can cover you in any situation:
Liability is for when you are found at fault for an accident. Suppose you were to injure someone or find yourself in an accident-related lawsuit. In that case, bodily injury liability will cover legal representation costs and other charges up to your limit.
Property damage liability is for if you were to damage someone else’s car or property in an accident. Up to your limit, your insurance will pay for the damage you could be held responsible for.
Also known as Comprehensive and Collision, it protects your actual car. Sometimes called full coverage, this coverage means anything that happens to your car accidentally can be fixed. If it cannot be fixed, your car will be totaled out and replaced at little or no cost to you out of pocket.
Collision covers what happens to your car in a crash.
In contrast, comprehensive is for anything other than a typical crash, covering events like hail, glass breakage, vandalism, or animals.
Personal injury protection is for when there is an accident and you or anyone else in your car is injured. This is called no-fault medical coverage, meaning you are covered no matter whose fault it is. Anything from medical expenses, funerals, and loss of income in the event of an injury will be covered up to the limit of your insurance policy.
Uninsured/underinsured motorist protects you if the person who hits you and is now liable for damages does not have enough or any insurance. You never have to worry about hit-and-runs again.
Car rental coverage allows you to get a rental car if your car is in the shop because of a comprehensive or collision claim. Typically, you will be reimbursed when your car has been sufficiently restored.
Emergency road service can help you out if you have a flat tire, lock your keys in your car, need a tow, or your battery dies. This is fantastic coverage that should not be neglected. You never know when you will need it.
Remember these claims must be from unpredictable events. This does not include wear and tear, and unlike other coverages, you have to pay a deductible, typically $500, before your car insurance will begin fixing your vehicle.
It’s important to understand that car insurance protects you and your assets in case of an accident to be able to determine how much car insurance you need.
How Much Does Car Insurance Cost?
The average car insurance policy costs about $125 per month in the United States. However, this does not mean that this is what your rate will be. Insurance rates vary by state and depend on a lot of different factors.
What Factors Influence Car Insurance Premiums?
Age and Gender
Younger drivers (under 25) pay the highest rates: being less experienced, they tend to get into more accidents. Female drivers – thanks to their better driving records, and married drivers – seen as more responsible, usually enjoy lower premiums.
Type of Vehicle
The make and model of your car will impact your insurance rate. More expensive vehicles cost more to insure because they will be more expensive to fix or replace. On the other hand, cars with good safety ratings or features can qualify for a lower rate.
With poor credit scores, it may be more difficult to get approved for a car insurance or you may have to pay more in premiums. In addition, a good credit score can make you eligible for various car insurance add-ons.
Due to higher rates of accidents, vandalism, and theft, urban drivers pay more than small-town or rural drivers. Your district’s density and average cost of repairs will also be taken into account to calculate your premium.
You driving behavior and claim history play an important role. If you’re a safe driver, you’ll get better rates for your vehicle type and location. With recent claims or driving violations you profile might be considered high risk.
aving a lapse in your car insurance, could flag your profile as a potential risk taker to insurance companies, aka a driver more likely to get into a car accident. In consequence, you will likely have to pay higher rates.
Of course, you can receive some fantastic discounts if you are eligible. Many companies offer bundling discounts for homeowners, renters, or life insurance clients who have their car insurance with the same company.
Other programs include but are not limited to multicar discounts, longevity discounts, student discount programs, or Bluetooth beacon programs, which track your driving and give you more control over your rate. It is important to define your needs and priorities to find the best car insurance company for your situation.
How Can I Choose the Best Car Insurance Company?
While everyone loves a discount, price is not the only factor in choosing an insurance company. If you want a relationship with your insurance agent, it might be best to pick somewhere with a physical office. Tech-savvy people might enjoy a seamless app process for claims. It is crucial to determine what is best for you.
What you should ask yourself
One company does not fit all, and a review of your needs and wants may be in order so you can feel completely satisfied with your car insurance. The best car insurance company for you will cater for your individual needs, whether you have young drivers in your family, or you’re looking to bundle policies. Be sure to check out all your options, not just for rates, but for yourself, too!
How Do I Buy Car Insurance?
Buying a car insurance online is actually quite easy if you follow these simple steps:
|How to buy car insurance|
1. Gather up all your information
Ensure you know your driving history, car make, model and vehicle identification number (VIN), the purchase date of your vehicle, and your driver’s license number.
2. Choose your coverage
Do some research and think about what you absolutely need from your car insurance and what would be nice to have.
3. Compare quotes online
It’s easy to get car insurance quotes online. Remember to look beyond the price, and check reviews for the selected companies.
4. Select your policy
Once you’ve made your choice, have your payment information ready to go. Your policy will take effect on your chosen date.
5. You’re insured!
Make sure your insurance is activated before your first drive, and don’t forget to cancel your old policy.
You’d rather talk to an agent to better understand your options? Or maybe you already know what you are looking for? There are other ways to buy a car insurance policy, based on the amount of help and personalization you need.